Key Findings

• Venture capital funding in the cryptocurrency sector has seen a revival, surpassing $4 billion invested.
• Primary investment focuses include Ethereum restaking, DePINs, the Bitcoin ecosystem, and RWA tokenization.

Venture capital investments in the cryptocurrency sector have experienced a significant revival this year, with over $4 billion being poured into various startups. The primary areas attracting these investments include Ethereum restaking, decentralized physical infrastructure networks (DePINs), the Bitcoin ecosystem, and real-world asset (RWA) tokenization.

Ethereum Restaking and DePINs

Ethereum restaking has grown significantly this year, driven by the EigenLayer protocol. This protocol enables the restaking of ether and liquid staking tokens across different blockchain networks, allowing users to earn extra rewards. Nearly $15 billion in assets has been amassed through this protocol, leading to the launch of various EigenLayer-based liquid restaking platforms like Ether.Fi, Renzo, and Puffer Finance.

Ether.Fi secured $27 million in funding, co-led by Bullish and CoinFund in February. Puffer Finance followed with an $18 million Series A round in April, reaching a $200 million valuation. Renzo received $3.2 million in seed funding in January, with additional funding from Binance Labs. DePIN projects, particularly on the Solana blockchain, such as Io.net, peaq, IoTex, Natix, and SendingNetwork, have also attracted investments by utilizing blockchain to decentralize physical hardware infrastructure.

Bitcoin Ecosystem and RWA Tokenization

The Bitcoin ecosystem is undergoing rapid growth with increased investment in startups. 2024 has seen more Bitcoin-related deals than the entirety of 2023. Tokenization is gaining popularity, with startups like Securitize, Centrifuge, and Backed securing recent funding. Over 25 tokenization-focused startups raised $80 million in total this year, demonstrating rising interest in real-world asset tokenization.